Developing local South African businesses as suppliers is something that we should all be encouraging, not only because of our high unemployment levels, but also for socio-economic reasons. Business success rates in South Africa are not good; in fact they are quite poor. “One in 10 businesses survives in the first three years, while 80% of entrepreneurs are struggling with their financials and many are not tax compliant,” says The Hope Factory’s CEO, Annie McWalter. Supplier Development is therefore actually a positive step in the right direction for transformation, and also for supporting and growing SMMEs.
In order to change this status, small businesses need help from bigger corporates to keep afloat and succeed. Mosa Dikoba, owner of Citrus Green Solutions, a black-owned small business in operation for two years, says that “through our corporate contracts we have grown to the extent that we can now compete against other established cleaning companies on a competitive level”. His business grew from employing two people at the start of 2014, to 20 at the end of 2015 due to gaining new corporate clients on a monthly basis.
Supplier Development (effective from 1st of May 2015, through the Amended B-BBEE Codes) is all about corporates working with their suppliers to promote success for both parties. Big businesses can do more to support the financial aspects and operations of SMMEs and also need to help smaller businesses to overcome their many challenges. “The sky is the limit if we receive continued support from corporate companies through Supplier Development” says Kruven Kerspay, owner of a Renew My Car Franchise. Kruven has recently signed a contract to service Coastlands Sales’ Fleet through Supplier Development.
Investors could either support existing black suppliers within their company supply chain or introduce new black suppliers. Both options require the investor to develop a supplier development strategy and acquire the assistance of a business development organisation to help them meet the requirements. To this effect, The Hope Factory has developed an Enterprise and Supplier Development directory, Gearing for Growth, available on The Hope Factory website (hopefactory.co.za). The directory profiles small businesses who are part of The Hope Factory business development programme, as potential black suppliers for the local business community.
The Hope Factory also offers Supplier Development solutions through company specific projects that are tailored to your business objectives and that satisfy all the compliance requirements of the Codes. “Business Mentorship is at the core of our programme. In our experience, entrepreneurs benefit most from a flexible and holistic approach to developing business and leadership skills that may or may not include funding, but must always include strategic mentoring.” says The Hope Factory’s CEO, Annie McWalter.
Quite simply, South Africa cannot afford to fail in its efforts to develop a viable, effective and sustainable small business sector. Violet Lupuwana, the director of Chumile Consulting, a 100% black woman owned company explains: “I am really excited about what the future holds. Since the introduction of Supplier Development I have been approached by several big corporates. My first big break in business was when Coega Development Corporation asked me to train SMMEs.”
Embracing Supplier Development will go a long way in ensuring that there is support beyond the invoice- that SMMEs are provided with much needed business mentorship to grow their businesses through more supply chain opportunities, become sustainable and impact their communities and the nation as a whole.
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